Activities Chapter 1



 Activity 1-2
 Food Crop versus Export Crop Production

The country of Azania is landlocked and therefore pays rather more for its imports
and receives less for its Sports than a country which is more closely linked into the
international trade system. Many of its farmers cultivate land which is suitable for
either maize or tobacco production. Maize can be grown using local varieties, which
have very low inputs requirements, or using hybrid seed which requires fertilizer. The
physical crop budgets are as follows:

 kg/ton
 Local Maize Hybrid Maize Tobacco
 Yield 800 2500 1200
 Seed input 25 25 4
 Fertiliser 0 255 1000

N.B. Labour is not a constraint and all labour used is family labour.


The cif prices that are paid at the border are as follows:

 US$/ton
 Local Maize Hybrid Maize Tobacco
 Output 175 160 600
 Seed input 175 160 300
 Fertiliser 400 400 400

At present the country imports maize in almost all years. It can sell all the tobacco it
produces.

Which crops should the government encourage to make most efficient use of the
country's agriculture resources? Would taking food security considerations into
account change your recommendation?

Are there any additional factors which the farmer should take into consideration
when deciding on cropping pattern?

[You may wish to know that Azania suffers periodic droughts. The yield of tobacco
varies much less in a poor rainfall year than does either local or hybrid maize. Hybrid
maize suffers very badly in poor rainfall years. The international prices of both
tobacco and maize have shown significant variation over the past few years, of up to
40% from one year to the next. However, insofar as there are any price trends, that for
tobacco seems to be going down, whereas the price of maize shows upwards
movements.]


-28-